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Wide-ranging reforms that were first started during President Donald Trump’s first term have been made possible by the official dismissal of a major court challenge that sought to thwart his efforts to restructure the U.S. Agency for International Development (USAID).
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The lawsuit—filed by the American Foreign Service Association along with the American Federation of Government Employees—had aimed to halt workforce reductions at USAID, arguing that the administration’s move to place employees on administrative leave and initiate terminations had breached federal employment protections. Concerns had also been raised regarding the impact on personnel stationed overseas.
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U.S. District Judge Carl J. Nichols, who was appointed during the Trump administration, issued a temporary restraining order at the time. After a brief prolongation, that delay was finally removed. In his final decision, Nichols made it clear that the judiciary’s function was limited to examining claims pertaining to employment rather than evaluating more general constitutional questions connected to the agency’s structure.
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Following the decision, around 2,000 USAID staff were placed on leave, while approximately 600 deemed essential were retained. For those stationed abroad, repatriation was offered within a 30-day window, fully covered by the federal government.
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Now that the lawsuit has been dropped, USAID’s reorganization under Trump has accelerated. Conservative legal commentators stressed the significance of the decision, particularly in light of the possibility of higher court affirmation, which may have an impact on upcoming challenges in the federal district courts in Washington, D.C.
Nonetheless, litigation surrounding the agency remains ongoing, particularly cases focused on the constitutional and financial aspects of federal agency dissolution. At the core lies a pivotal question: whether a sitting president retains the authority to dismantle entities originally established by Congress.
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Several political leaders, including former Presidents George W. Bush and Barack Obama, participated in symbolic gestures to mark the official closure of USAID. U2’s Bono joined them via videoconference. Many people saw these appearances as coordinated attacks on the reform program of the Trump administration. Instead of addressing the revelations of poor management that prompted the agency’s restructuring, sentiments conveyed during the virtual farewell mainly relied on emotive pleas, portraying the shutdown as a humanitarian tragedy.
One of the first organizations the Department of Government Efficiency (DOGE) selected for examination was USAID, which was established under President Kennedy to manage foreign economic aid. Under President Trump’s leadership, with Elon Musk as its then-oversight, the agency began conducting thorough audits with the goal of reducing systemic waste in all federal programs. Particularly, USAID had been criticized for persistent inefficiency and ideological entrapment.
Upon its official absorption into the State Department, the agency’s closure was cast by Trump-aligned policymakers as a decisive step toward restoring accountability and ending taxpayer-funded global projects that, for years, had lacked transparency.
While critics attempted to frame the closure as a humanitarian loss, supporters of the administration viewed it instead as a long-overdue correction to a bloated agency. The legal and administrative precedent now set may influence how future administrations approach reforming—and potentially dissolving—federal institutions deemed redundant or politically compromised.